Daily FX Update, 21 July 2015

v  Fed’s Bullard sees 50% chances of September hike v  Eurozone current account surplus decline in May v  Greece reopens its banks, but capital controls remain in place v  China‘s lending increase 42% m/m to CNY1.28 trillion in June v  Taiwan's export orders contract by 5.8% y/y in June v  Philippine’s budget balance in May 2015 is at a surplus of PHP67.3 billion

·         US – Fed’s Bullard sees 50% chances of September hike. Mr Bullard said in the interview he envisions a "couple" of rate rises this year if the economy achieves the 3% growth level he expects for the remainder of the year. 

·         Euro area – Eurozone current account surplus declined in May. The current account surplus fell to a seasonally adjusted EUR18 billion from EUR24 billion in April. The surplus on trade in goods decreased to EUR23.9 billion from EUR28.4 billion, while the surplus on services increased to EUR6.3 billion from EUR3.6 billion.

·         Greece – Greece reopened its banks, but capital controls remained in place. It has included withdrawal limits and an inability to make international transfers. The Greek government also made EUR6.8 billion worth of repayments to the ECB and IMF after securing EUR7 billion in bridging finance last week.

·         Currency – The NZD bounced on supportive comments from PM Key on the economy, but global commodities continued to weigh on currencies. The USD strengthened on comments from St. Louis President Bullard.

·         Equity – US markets were up 0.1-0.2% supported by better than forecast US corporate earnings which generally over-shadowed a slump in earnings from commodity producers.

·         Rate – US 10-year Treasury yields increased by 3 basis points to 2.37% whereas European yields were generally lower.

·         Energy – WTI prices slumped below USD50/bbl for the first time in more than three months on Iran shipment worries. Expectations of another increase in inventories at Cushing are also causing a downward pressure on prices.

Precious Metal – Gold price sinks below US$1,100 for the first time in more than five years on Monday. 

INDICATIVE MAJOR CURRENCIES Last Close  8.10 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.8077 3.7960 3.8280 3.7940 3.8390 JPY/MYR (100) 3.0638 3.0500 3.0820 3.0400 3.1000 SGD/MYR 2.7777 2.7630 2.7950 2.7600 2.8100 EUR/MYR 4.1279 4.1120 4.1450 4.0900 4.1800 AUD/MYR 2.8089 2.7950 2.8270 2.7800 2.8500 GBP/MYR 5.9328 5.9190 5.9520 5.8900 6.0000 USD/JPY 124.28 124.16 124.57 123.76 124.76 EUR/USD 1.0841 1.0680 1.0990 1.0780 1.0890 AUD/USD 0.7377 0.7220 0.7530 0.7330 0.7430